Renting an Apartment in Tel Aviv as a Non-Resident: The Rules

To rent an apartment in Tel Aviv as a non-resident, you must collect a copy of the tenant’s passport, establish a shtar ’hov to guarantee payments, and identify a solvent arev. The procedure also requires verifying ownership via the tabou and a technical inspection by a professional to protect your asset. Unlike systems in the United States that rely on rent guarantee insurance, management of guarantees in Israel relies on debt instruments.

Verify the identity and status of the occupant via the teoudat zeout or passport

The first step is to obtain formal proof of identity. For a tenant residing in Israel, we request a copy of the teoudat zeout. This document is the pivot of Israeli administration. For a non-resident or a foreign visitor, we require a copy of a valid passport. We verify the consistency between the identity presented on this document and the income documentation provided by the tenant.

A major difference with American systems lies in the absence of a Social Security number serving as a unique identifier for credit checks or access to credit databases. In Israel, identity is verified directly on the physical document. If you wish to rent from abroad, you must be particularly vigilant regarding the validity of your foreign tenants’ documents, as identity theft recourse is complex to manage locally.

We proceed to examine the validity of the issue and expiration dates. We also verify that the address mentioned on the teoudat zeout corresponds to the tenant’s actual current residence, even if that address is that of a parent or a previous home.

Secure payment with the shtar ’hov and identification of the arev

The guarantee system in Israel does not rely on rent guarantee insurance as it is known in the United States. We use the shtar ’hov, which is a promissory note. This is a recognition of debt signed by the tenant. We recommend establishing a shtar ’hov for each month of the lease or for the total duration of the lease, depending on the chosen coverage strategy. This document allows you to claim due sums in case of default, but it does not constitute insurance: it does not guarantee an immediate payment of funds by a third party; it only provides a title for legal action.

To reinforce this security, we identify an arev, the guarantor. Identifying the arev requires collecting their own identity and income documentation. We verify the solvency of the arev by examining their bank statements and proof of income to ensure they have the financial capacity to cover the primary tenant’s unpaid rent.

• Establish a shtar ’hov for each rent installment.
• Verify the arev‘s ability to honor their commitments.
• Sign documents before a witness or a notary to reinforce their legal value.

Justify financial capacity for a lease in Israel

Payment capacity is the primary selection criterion. We systematically request recent bank statements from the last three months to attest to the stability of the tenant’s financial flows. For employees, we collect pay stubs or employer certifications. These documents confirm that the net income is compatible with the rent requested in Tel Aviv.

The case of the non-resident presents specificities. Since the tenant does not necessarily have an Israeli banking history, we request proof of income from abroad. This includes international employment contracts, foreign tax assessments, or international bank account statements. We verify the conversion of these incomes to ensure they cover local costs, including the indexation of rent to the cost-of-living index.

If the tenant is an investor or a professional on assignment, we examine their corporate documents or proof of funds. This rigor is even more necessary when you manage a property where the price per m2 in Tel Aviv and rental management criteria impose high rents that allow no approximation regarding solvency.

Establish the condition of the premises before handing over the keys: the bedek bayit

To protect the condition of your apartment, we recommend hiring a professional to perform a bedek bayit (building inspection) before the tenant moves in. Unlike in the United States, there is no standard pre-rental inspection requirement, but the bedek bayit is the reference tool to prevent disputes. A professional inspects the structure, electricity, plumbing, and specific equipment.

When drafting the key handover document, we precisely note the operating condition of the following elements:

1. The mamad: verification of the airtightness of the reinforced doors and the condition of the seals.
2. The mazgan: testing the cooling and ventilation of the air conditioners.
3. The doud shemesh: verification of solar hot water production.
4. Plumbing and the condition of the sanitary facilities.

We use high-resolution photos and the inspector’s report to create a reference file. In the event of damage noted at the end of the lease, these documents allow you to justify a deduction from the security deposit or the use of a shtar ’hov.

Allocate the charges of the arnona and the vaad bayit

The lease agreement must precisely define the allocation of charges. In Israel, two types of fees are common: the arnona (municipal property tax paid to the municipality) and the vaad bayit (condo fees for building maintenance). We specify in the lease who pays these amounts. Generally, the tenant covers the arnona and the vaad bayit, but this can be negotiated.

We verify the payment history of the municipal tax with the Tel Aviv municipality before signing to ensure no arrears are attached to the property. A dispute regarding the arnona can lead to administrative complications for the owner.

Manage specificities related to the tabou and ownership

Before signing a lease, we verify the identity of the lessor via an extract from the tabou (land registry). This step is crucial to ensure that the person signing the contract is indeed the legal owner or holds a valid power of attorney. We check for the absence of disputes, mortgages, or liens on the property in the land registry.

A notable difference with the United States is the importance of direct and systematic verification at the tabou. While a title company or attorney in the U.S. ensures much of this security, in Israel, accessing land registries is a step that the owner or their manager must integrate into their control process. If the property comes from an inheritance, we verify the validity of the tsav yerusha (inheritance order) to confirm that the heirs have the right to rent the property. This is particularly relevant when renting an apartment from an inheritance in Israel.

Anticipate tax obligations: mas hachnasa and mas shevach

Collecting rent generates tax obligations with the reshut ha-misim (the Israeli tax authority). We advise you to systematically declare your rental income to avoid any adjustments. Income tax, called mas hachnasa, applies to the rent received. The amount of this tax depends on your other income and your status as a resident or non-resident.

It is also necessary to anticipate the impact of taxation on resale. When selling your property, you may be subject to mas shevach (real estate appreciation tax). Managing rental income and keeping proof of all expenses related to the property (renovations, management fees) is necessary for calculating the capital gain upon resale. We prepare these documents to facilitate future declarations with the reshut ha-misim.